Seven years on from the Wall Street financial crisis of 2008, when the U.S. economy began to sink into recession, economic recovery has shifted into higher gear. For example, according to Reuters, Q3 2014 saw the economy grow at a 5 percent clip – its quickest pace in 11 years.
There were concerns during those stormy economic times post 2008, that the dollar would be unable to maintain its long-held position as the world’s number one currency. However, as the list of global financial problems grows, the dollar is showing its resilience, with the dollar index reaching an 11 year high in March 2015.
The strengthening economy has led to the recovery of the U.S. real estate market following the credit crisis – significantly impacting house prices across the country. A recent report compiled by the online real estate database Zillow indicates that home values in the U.S. have gone up 5.4 percent over the past year and predicts they will rise 1.9 percent within the next year.
Despite these price rises, coupled with the strong U.S. dollar, there is still demand from overseas investors. For example, in April radical changes to the UK pension laws will enable anyone over 55, with a suitable pension plan, to take a large chunk of their accumulated savings as cash – freeing up a huge amount of money that could potentially be used to invest in property overseas. This is made all the more compelling when you consider that, according to a report by Rightmove – the UK’s largest property portal; the 55-64 age group are the most likely to buy abroad, with the U.S. being the third most popular location for Brits buying property overseas.
With their buying power reduced by the strong dollar and house prices on the rise, real estate professionals can provide overseas clients with valuable advice around using a foreign exchange specialist – to help them get the most from their money, when making international payments. Not only do currency specialists offer exchange rates that are typically more competitive than the banks and lower transfer fees, they also provide specialist tools to help protect their customers from negative rate movements, such as a forward contract.
Often used by those looking to buy a home abroad, a forward contract enables them to secure an exchange rate up to two years in advance. Allowing buyers to guarantee the cost of purchasing a property overseas will not rise, between the time an offer is made and the completion date.
For more information, visit www.moneycorp.com/usa.
